OhioBWC - Basics: (Policy library) - File

Policy and Procedure Name:

Wages

Policy #:

CP-23-01

Code/Rule Reference:

R.C. 4123.61; R.C. 4123.62; R.C. 4123.56(A),(E),(F);

R.C. 4123.03

Industrial Commission (IC) Resolution/Memo Reference:

Joint Resolution R80-7-48;

Adjudications Before the Industrial Commission, Memo Q1

Case Law Reference:

State ex rel. Cobble v. Indus. Comm’n;

State ex rel. Drone v. Indus. Comm’n

Effective Date:

06/27/2025

Approved:

Shawn Crosby, Chief Operating Officer

Origin:

Operational Policy and Support

Supersedes:

Policy # CP-23-01, effective 03/11/2022

History:

Previous versions of this policy are available upon request

 

Table of Contents

 

I. POLICY PURPOSE

II. APPLICABILITY

III. DEFINITIONS

Allowances

Average Weekly Wage (AWW)

AWW Earning Period

Best Available Evidence

Bonuses

Cafe 125

Deferred Compensation Deductions

Deferred Compensation Account Disbursements

Earning Period

Employer Contributions to Employee Health Care Plan

Foster Child Care Payments

Frequency of Earnings

Full Weekly Wage (FWW)

FWW Earning Period

Gross Earnings

Passive Income

Per Diem Payments

Reimbursements

Regular Earnings

Retirement Benefits

Self-Employment Earnings

Severance Pay

Social Security Benefits

Statewide Average Weekly Wage (SAWW)

Stipends

Tips

Unemployment Benefits

Vacation Pay

IV. POLICY

A.        Wage Calculation and Wage Setting: General

B.        Evidence of Earnings

C.        Earnings Included and Excluded in Wage Calculation

D.        Calculating the FWW

E.        Calculating the AWW

F.        Wages Set by Order

G.        Resetting Wages

H.        Adjusting Previously Paid Compensation

V. PROCEDURE: CLAIM OWNER

A.        General Claim Note and Documentation Requirements

B.        Request for Earnings

C.        Reviewing Earnings Information

D.        Referral to Wage Team

E.        Issuing the Order to Set Wages

F.        Requests to Set or Reset Wages

G.        Resetting Wages Set by BWC Order

H.        Resetting Wages Previously Set by IC Order

I.         Making Payment Based on a BWC or IC Order

J.        Adjusting Previously Paid Compensation

VI. PROCEDURE: WAGE TEAM

A.        General Claim Note and Documentation Requirements

B.        Calculation of Wages: General Information

C.        Earnings Included and Excluded from Wage Calculation

D.        Converting Earnings to a Weekly Rate

E.        Calculating the FWW

F.        Calculating the AWW

 

I. POLICY PURPOSE

 

The purpose of this policy is to ensure BWC calculates the full weekly wage (FWW) and the average weekly wage (AWW) consistently and in compliance with the law.

 

II. APPLICABILITY

 

This policy applies to all BWC Claims Services staff.

 

III. DEFINITIONS

 

Allowances: Payments of a set amount made to an employee at given intervals for a specific purpose. Allowances are paid without requiring proof that the employee spent the allowance monies on the specific purpose. Common types of allowances include payment for travel, uniforms, laundry, and housing.

 

Average Weekly Wage (AWW): Basis upon which to compute benefit payments for temporary total (TT) compensation (disability) and living maintenance (LM) compensation after the initial 12-week period of disability; death benefits; permanent total disability (PTD) benefits; percentage of permanent partial disability (%PP) benefits; wage loss (WL) compensation; and may be used for payment of living maintenance wage loss (LMWL) if greater than the full weekly wage (FWW).

 

AWW Earning Period: The timeframe in which the injured worker (IW)’s earnings are used to calculate the AWW which is the 52 weeks prior to the date of injury (DOI), or date of disability (DOD) in occupational disease (OD) claims, excluding periods of unemployment beyond the IW’s control (including but not limited to sickness, industrial depression, strike, lockout).

 

Best Available Evidence: For purposes of this policy, BWC defines best available evidence as the more detailed earnings information for the earning period (e.g., a payroll report from the employer that provides more detail than a W-2).

 

Bonuses: Payments made to an employee by an employer, which are in addition to regular earnings.

 

Cafe 125: Non-taxable money set-aside from earnings that is generally used for employee contributions towards health care, life insurance or daycare.

 

Deferred Compensation Deductions: Deductions the employer makes from an employee’s pay that the employee can receive at some later date.

 

Deferred Compensation Account Disbursements: Retirement income paid from previously deferred funds.

 

Earning Period: Period of time used to identify earnings to be included in the FWW and AWW wage calculations. Earning periods are generally based on full pay periods prior to the DOI, or DOD in OD claims (e.g., 52 full weekly pay periods).

 

Employer Contributions to Employee Health Care Plan: Payments made by the employer toward the purchase of a health-care plan for the employee.

 

Foster Child Care Payments: Payments made to foster parents to cover the costs of care for a foster child.

 

Frequency of Earnings: How often pay is received (e.g., weekly, biweekly, monthly).

 

Full Weekly Wage (FWW): Basis for payment of compensation for the first 12 weeks of TT or LM and may be the basis for LMWL if it is greater than the AWW.

 

FWW Earning Period: The timeframe in which the IW’s earnings are used to calculate the FWW. The FWW is ordinarily based on the IW’s earnings when the IW has been continuously employed (with the employer of record (EOR) or any other employer) for six weeks or seven days prior to the DOI, or DOD in OD claims.

 

Gross Earnings: Earnings prior to any deductions (e.g., taxes, insurance, tax-deferred programs, garnishments).

 

Passive Income: A type of unearned income that is acquired with minimal labor to earn or maintain. Passive income may include income reported on IRS Schedule E (e.g., rental properties, royalties, partnerships, S corporations, trusts); retirement benefits; disbursements from a deferred compensation account; rental property income; or income from the stock market.

 

Per Diem Payments: Payments made by the employer to the employee as a daily expense allowance.

 

Reimbursements: Payments made to an employee based on actual cost to the employee and may require the submission of receipts to the employer (e.g., travel, uniforms, laundry, and housing).

 

Regular Earnings: For purposes of this policy, regular earnings are defined as the hourly rate times hours worked or a predetermined, fixed amount (regular salary).

 

Retirement Benefits: Pay to an employee who has left employment due to reaching a specific age, or specific number of years of service, or at the election of the employee.

 

Self-Employment Earnings: Net income (income after expenses) an individual earns in association with certain types of solely owned or partially owned businesses.

 

Severance Pay: Pay given to an employee upon termination of employment.

 

Social Security Benefits: Payments made by the Social Security Administration to an individual because of retirement, death, or disability.

 

Statewide Average Weekly Wage (SAWW): The average weekly earnings of all workers employed in Ohio employment, subject to Chapter 4141 of the Ohio Revised Code.

 

Stipends: Allowance for daily living expenses paid by the employer.

 

Tips: Money given by a patron to a servant, waiter, or other similarly related individual for services rendered.

 

Unemployment Benefits: Benefits paid by a government agency to an individual who has lost employment.

 

Vacation Pay: Payment from an employer to an employee for a break or holiday from work.

 

IV. POLICY

 

A.      Wage Calculation and Wage Setting: General

1.      It is BWC’s policy to calculate the FWW and AWW in a claim based on the best evidence available at the time of calculation.

2.      BWC will request earnings and attempt to calculate wages:

a.      In all lost-time claims (including when a claim changes from medical- only to lost-time);

b.      When there is evidence on file that a medical-only claim will become lost-time; or

c.       Upon receipt of an Application for Determination of Percentage of Permanent Partial Disability or Increase of Permanent Partial Disability (C-92).

3.      BWC will convert earnings that are paid with a frequency other than weekly or biweekly to a weekly rate for purposes of calculating wages.

4.      The earning periods for the calculation of wages will be determined based on full pay periods prior to the DOI, or DOD in OD claims.

5.      When setting wages for the purpose of paying compensation other than %PP, BWC will set both the FWW and AWW.

6.      When setting wages for the purpose of paying %PP, BWC will set:

a.      Both the FWW and the AWW when detailed earnings information is available; or

b.      Only the AWW when detailed six-week and/or seven-day prior earnings are not available.

7.      BWC will set wages in a medical-only claim upon a written request (e.g., Motion (C-86), Wages – IW or Wages – Emp) with attached supporting documentation.

 

B.      Evidence of Earnings

1.      It is the responsibility of the IW to provide earnings information for the calculation of wages upon BWC’s request. The EOR may also provide evidence of earnings to BWC.

2.      Evidence of earnings includes, but is not limited to:

a.      Payroll reports from an employer;

b.      Copies of check stubs;

c.       Income tax returns signed by the IW or another person who prepared the taxes and has the authority to sign on the IW’s behalf;

d.      W-2s for the year of and/or year prior to the DOI, or DOD in OD claims;

e.      1099 forms for the year of and/or year prior to the DOI, or DOD in OD claims when accompanied by:

i.        Evidence of expenses related to the earnings; or

ii.      An Injured Worker Earnings Statement (Wages – IW) form, or equivalent statement that shows there were no expenses related to the earnings;

f.        Social Security reports of earnings that include the IW’s name;

g.      Employer Report of Employee Earnings (Wages – Emp) form, or equivalent statement signed by the employer;

h.      Wages – IW form, or equivalent signed by the IW.

i.        The Wages – IW form, or equivalent may be submitted without supporting documentation (unless specifically noted on the Wages – IW), but it is BWC’s policy to use its discretion when determining if additional information is required prior to calculating wages. 

ii.      If BWC suspects that wages reported as income have not been reported to the IRS, BWC may notify the IRS of any discrepancy (e.g., S-Corporation profits, partnership profits).

 

C.      Earnings Included and Excluded in Wage Calculation

1.      The types of earnings included in BWC’s calculation of wages include, but are not limited to:

a.      Gross regular earnings, before deductions such as deferred compensation, Cafe 125, etc.;

b.      Tips;

c.       Self-employment earnings (e.g., Form 1040 Schedule C);

d.      Allowances (e.g., uniforms, tools, etc.);

e.      Bonuses related to direct and active participation in employment during the earnings period (e.g., performance bonus);

f.        Profit sharing related to work activity (e.g., earned based on hours worked, product produced, or other earnings related to work activity);

g.      WWL or LMWL paid in a prior workers’ compensation claim (in addition to earnings from an employer);

h.      Per diem or stipend payments;

i.        Vacation, sick leave, and holiday pay for periods which fall within the earnings period;

j.        Lump sum payouts for vacation, sick, personal, or other leave is included for AWW calculation only;

k.      Farm income (e.g., Form 1040 Schedule F);

l.        Earnings reported on the IW’s federal income tax return that are specifically subject to either Social Security withholding, Medicare withholding, or self-employment tax (e.g., housing allowance);

m.    Income specifically subject to self-employment tax (Schedule SE); or

n.      Payment received in lieu of receiving health insurance.

2.      The types of earnings excluded in BWC’s calculation of wages include, but are not limited to:

a.      Bonuses unrelated to work activity (e.g., shareholder bonus, contract ratification, company-wide holiday bonus);

b.      Profit sharing unrelated to work activity (e.g., owns stock, dividends);

c.       Disbursements from previously deferred compensation;

d.      Retirement benefits paid from Social Security or other retirement programs;

e.      Employer contributions to employee health-care plans;

f.        Payment received for foster care of children;

g.      Reimbursement for items such as travel, uniforms, etc.;

h.      Non-working wage loss (NWWL) compensation paid in a prior workers’ compensation claim;

i.        Workers’ compensation benefits paid in a prior claim due to inability to work (i.e., TT, LM, or SC, including occupational injury leave (OIL);

j.        Unemployment benefits;

k.      Passive income;

l.        Severance pay; and

m.    Other forms of income reported on an IW’s tax return that are not subject to Social Security withholding, Medicare, or self-employment tax, including, but not limited to:

i.      Interest income;

ii.     Dividend income;

iii.    Taxable refunds of state and local income taxes;

iv.   Alimony received;

v.     Capital gains;

vi.   Other gains reported on IRS Form 4797;

vii.  IRA distributions;

viii. Pension distributions;

ix.   Income reported on Schedule E (including, but not limited to, rental real estate, royalties, partnerships, S corporations, trusts);

x.     Social Security benefits;

xi.   Other income not subject to self-employment tax (Schedule SE); and

xii.  Tuition reimbursement (1098T).

 

D.     Calculating the FWW

1.      For IWs who have been either continuously employed for six weeks prior to the DOI, or DOD in OD claims, or worked at least seven days prior to the DOI, or DOD in OD claims, the FWW will be the higher amount of either:

a.      The gross earnings, including overtime pay, for the six weeks prior to the DOI, or DOD in OD claims, divided by six; or

b.      The gross earnings, excluding overtime pay, for the seven days prior to DOI, or DOD in OD claims.

2.      For IWs who have not been continuously employed for six weeks prior to the DOI, or DOD in OD claims, and who have not worked for at least seven days prior to the DOI, or DOD in OD claims, the FWW is calculated by multiplying the hourly rate times the number of hours the IW was scheduled to work the week of the DOI, or DOD in OD claims.

3.      When no earnings are submitted to BWC to support an FWW calculation, BWC must set the FWW equal to one-third of the SAWW.

4.      When the IW had no earnings in the six weeks prior to the DOI, or DOD in OD claims, BWC will set the FWW at $0.

 

E.      Calculating the AWW

1.      The AWW is calculated by dividing the total earnings for the 52 weeks prior to the DOI, or DOD in OD claims, by 52 minus any weeks that should be excluded.

2.      Except as described in IV.E.3 immediately below, BWC will set the AWW at $0 when no earnings are submitted to BWC to support an AWW calculation for the 52 weeks prior to the DOI, or DOD in OD claims.

3.      BWC will not set the AWW without earnings information for the purpose of paying:

a.      A %PP award, as there is no minimum award for this benefit type; and

b.      NWWL, working wage loss (WWL), or LMWL, as earnings information is required to prove a loss of earnings to be eligible for these benefits.

4.      Periods of Unemployment

a.      Periods during which an IW is unemployed for reasons beyond their control are generally excluded from AWW calculation with appropriate documentation. Reasons beyond the IW’s control include, but are not limited to:

i.        Sickness of the IW or a family member the IW had to care for;

ii.      Industrial depression;

iii.    Strike or lockout;

iv.     Disability related to a prior workers’ compensation claim; or

v.       The IW was unemployed but was seeking employment (additional requirements for seasonal workers detailed below);

b.      Weeks during which an IW participated in paid job training or job-seeking skills training while receiving unemployment will be excluded. This does not include periods of job training with an employer.

c.       The periods during which the IW received partial unemployment benefits while working will be excluded if the IW provides evidence that they continued to seek full-time employment during that period.

d.      Other reasons to exclude weeks from AWW calculation include, but are not limited to: 

i.        Pregnancy or parental leave of the IW, excluding an extended period based on the IW’s choice instead of medical necessity; or

ii.      The IW is new to the workforce (i.e., the IW recently graduated from high school or college).

e.      Seasonal Workers

i.        Seasonal workers must show that they were looking for work during periods of unemployment.

ii.      If seasonal work is a lifestyle choice, weeks of unemployment are included in the wage calculation, regardless of whether proof of a job search is submitted.

f.        Incarceration

i.        In general, periods of unemployment that were the result of the IW being incarcerated are included in the calculation of the AWW.

ii.      Reasons these periods may be excluded include:

a)      The IW is confined during a trial but is found not guilty; or

b)     The IW is exonerated.

g.      If the IW has not worked for reasons within their control (e.g., IW stayed home to care for children), those weeks are generally included in the calculation.

5.      If the IW presents special circumstances that make the method BWC uses to set wages unfair, BWC may use an alternative method for setting wages to provide substantial justice.

 

F.      Wages Set by Order

1.      BWC will issue an order to:

a.      Set the initial FWW and/or AWW in a claim; or

b.      Reset wages when it is within BWC’s jurisdiction to do so.

2.      When the Ohio Industrial Commission (IC) has previously ruled on the setting of wages, BWC will refer the request to reset the FWW and/or AWW to the IC with BWC’s recommendation regarding the resetting of wages.

3.      BWC will make payment in accordance with a BWC or IC order on wages.

 

G.     Resetting Wages

1.      BWC will re-evaluate wages only upon receipt of:

a.      A written request on a C-86, Wages – IW, or Wages – Emp, or the equivalent; and

b.      New evidence that is more detailed than that which was used in the prior calculation of wages.

2.      When the IC has only ruled on one of either the FWW or AWW, BWC retains jurisdiction to reset wages not ruled on by the IC (e.g., the IC ruled only on the FWW, so BWC may reset the AWW).

3.      BWC may adjust the FWW and/or AWW even when the written request is only for one or the other, but the evidence supports re-evaluation of both.

4.      BWC will issue a BWC order to reset the FWW and/or AWW when an error in the prior calculation is discovered.

 

H.     Adjusting Previously Paid Compensation

1.      BWC will adjust previously paid compensation when wages are reset and a BWC or IC order has been issued that includes language ordering the adjustment of previously paid compensation.

2.      When an adjustment to wages is made based on a request from a party to the claim and additional payment is due to the IW, the adjustment will be limited to compensation paid within the two years prior to the filing date of the request.

3.      When BWC makes an adjustment to wages without a request from a party to the claim, and additional payment is due to the IW, all compensation paid in the claim will be adjusted.

4.      All compensation paid in the claim will be adjusted when the change in wages results in the IW being overpaid, no matter who initiates the adjustment.

a.      The amount of the overpayment will be determined after the order to reset the wages is final.

b.      Refer to the Overpayment of Compensation policy and the Adjustment of Overpaid Compensation policy for information regarding declaring and collecting an overpayment.

 

V. PROCEDURE: CLAIM OWNER

 

A.      General Claim Note and Documentation Requirements

1.      BWC staff will refer to the Standard Claim File Documentation and Altered Documents policy and procedure for claim note and documentation requirements; and

2.      Must follow any other specific instructions for claim notes and documentation included in this procedure.

 

B.      Request for Earnings

1.      The claims service specialist (CSS) must request wage information from the EOR and IW, or their representatives in all lost-time claims, and in medical-only claims where lost time will likely occur (e.g., IW is working light duty but is scheduled for a surgery related to the claim). In the event this was not completed at the initial allowance, the CSS must request wage information regardless of where the claim is in the process.

a.      The CSS must:

i.        Make at least one phone call to the parties to the claim. If the initial phone call was unsuccessful, the CSS must send a follow-up letter via fax, email, or mail.

ii.      Document all attempts to gather the earnings in the claims management system.

b.      During contact with the EOR, the CSS should

i.        Determine if the IW was employed by the EOR for the 52-week period prior to the DOI, or DOD in OD claims;

ii.      Request earnings for the 52 weeks prior to the DOI, or DOD in OD claims, or for whatever portion of that time the IW was employed by the EOR;

iii.    Explain that the amount submitted should be the gross earnings; 

iv.     Verify or obtain the hourly rate and the scheduled work hours;

v.       Explain that if the IW has income such as tips, commissions, bonuses, allowances, or income other than their regular earnings, the EOR must provide additional information regarding these earnings; and

vi.     Inform the EOR that the Wages – Emp form:

a)      Can be completed online if the EOR logs into their BWC account;

b)     Is available online to be printed by the EOR; or

c)      BWC can send a copy to the EOR upon request.

c.       During contact with the IW, the CSS should explain that:

i.        BWC will attempt to obtain earnings information from the EOR, but it is the IW’s responsibility to provide earnings information for the EOR and from all employers who employed the IW during the 52 weeks prior to the DOI, or DOD in OD claims. This includes earnings from self-employment.

a)      Earnings information must be submitted in writing;

b)     The earnings amount submitted should be the gross earnings; 

c)      Any earnings other than the IW’s regular earnings (e.g., tips, commissions, bonuses, allowances, etc.) must be explained in writing;

d)     If annual earnings will be submitted, they must be for the year of and/or the year prior to the DOI, or DOD in OD claims;

e)      Any unpaid weeks during the earnings periods must be explained and submitted on a Wages – IW or Wages – Emp form, or equivalent statement;

f)       Permission for BWC to obtain wage clarification from any employer other than the EOR must be provided in writing on the Wages – IW form; and

g)      The Wages – IW form:

i)      Is available online and can be printed by the IW; or

ii)     BWC can send a copy to the IW upon request.

ii.      BWC calculates wages based on the earnings evidence the IW submits.

d.      The CSS must set a work item in the claims management system for three business days after making phone, fax, or email contact with the IW, or 11 business days after sending a letter to follow-up on receipt of earnings information.

2.      If no wage information was received following the initial request, the CSS must make an additional attempt to obtain it.

a.      The CSS will either call the:

i.        IW if they are unrepresented; or

ii.      IW representative if the IW is represented.

b.      If the call is unsuccessful, the CSS will either send an email, letter, or fax to request the missing information.

3.      The CSS must not rely on the managed care organization (MCO) note indicating wages are $0. The MCO does not request wages from the parties to the claim and the MCO is not responsible for requesting wage information. This is not considered an attempt to obtain wages.

 

C.      Reviewing Earnings Information

1.      The CSS must review detailed earning information upon receipt to identify any missing information or variations in earnings that require an explanation.

a.      If detailed earnings (e.g., weekly, biweekly, monthly) are provided, the CSS should attempt to:

i.        Identify any variations in earnings (e.g., weeks in which earnings are much higher or lower than other weeks);

ii.      Obtain an explanation for any variations or unpaid periods identified by the EOR or IW; and

iii.    Document the explanation in claim notes.

b.      Earnings information submitted by the IW without supporting evidence (e.g., copies of pay stubs) must be provided with a Wages – IW form, or equivalent statement.

c.       Earnings information submitted by an employer does not require a Wages – Emp form, or equivalent statement.

2.      If 52 weeks of earnings are not on file and no explanation for the missing weeks has been documented, the CSS should attempt to contact the IW to request additional evidence regarding earnings or unpaid weeks.

3.      If annual earnings are received for two years and there is a significant variation between the years, the CSS should attempt to contact the IW for clarification.

4.      If the earnings information submitted includes a bonus, the CSS should attempt to determine the nature of the bonus and the period over which it was earned.

5.      If the earnings information includes commission payments, the CSS should attempt to determine the period over which the commission was earned.

6.      When 1099 tax forms are submitted as earnings, the CSS must ensure that the 1099 forms are accompanied by:

a.      Evidence of expenses related to the earnings is provided; or

b.      A Wages – IW form, or equivalent statement that indicates there were no expenses related to the earnings.

7.      When income tax statements are provided, the CSS must:

a.      Make certain the documents are signed by the IW, signed by a tax preparer, or accompanied by a Wages – IW form, or equivalent statement which declares that the documents submitted are a true and accurate copy of what was filed with the IRS;

b.      Obtain W-2s or a Schedule C for self-employed IWs to support earnings amount;

c.       Determine if the return is a joint return, and if it is, verify that earnings for just the IW can be identified; and

d.      Redact sensitive information provided for anyone other than the IW (e.g., spouse or children).

8.      If a self-employed IW submits a copy of their quarterly income tax report, the CSS will verify that the report is signed by the IW, a tax preparer, or accompanied by a Wages – IW form, or equivalent statement declaring that the documents submitted are a true and accurate copy of what was filed with the IRS.

9.      Self-employed IWs may submit monthly profit and loss statements prepared by a tax preparer as proof of earnings.

10.  IWs may provide a Wages – IW form, or equivalent to support periods of unemployment. The statement must include an explanation of why the IW was not working and may require additional supporting evidence.

a.      Except for seasonal employers, additional evidence to support periods during which the IW received unemployment benefits is not required if BWC can verify the receipt of unemployment benefits with the Ohio Department of Job and Family Services (ODJFS).

b.      Seasonal employees must submit evidence of job search efforts for periods of unemployment. Evidence may include:  

i.        A signed statement on the Wages – IW form, or its equivalent which describes the IW’s job search activity, including type of work they looked for, and the method of job searches; or

ii.      Copies of confirmation from online job searches; or

iii.    Copies of correspondence with potential employers, job applications, resumes, or other evidence of contact with employers.

c.       The EOR may provide evidence to support periods of unemployment (e.g., plant shutdowns or layoffs).

d.      The CSS must collaborate with their injury management supervisor (IMS) to determine if additional supporting evidence is needed.

11.  If an IW submits evidence that they were working and receiving partial unemployment compensation over the same period, the CSS will:

a.      Ask the IW if they continued to search for a job during that period; and

b.      If applicable, request evidence of the IW’s job search efforts as described in Section V.C.10.b above.

12.  If, after a thorough review, the CSS determines that the earnings information submitted is usable, the CSS must make a referral to the Wage Team immediately.

13.  If, after thorough review, the CSS determines that the earnings information is not usable (e.g., pay stub is unreadable) or requires clarification (e.g., the amounts do not make sense), the CSS should attempt to contact the party that submitted the wage information in question and either request new information or clarify the information on file. The CSS must then:

a.      Make a referral to the Wage Team immediately upon receipt of the requested information; or

b.      If the requested information is not received within the timeframes detailed in the Mailbox Rule policy and procedure, make a referral to the Wage Team with whatever information is on file.

 

D.     Referral to Wage Team

1.      In general, the CSS must send claims to the Wage Team for computation of wages and setting of the FWW and AWW (this includes setting wages at $0 because the IW had no earnings).

a.      The exception is if a claim meets all the following criteria:

i.        The IW had earnings, but they have not been submitted;

ii.      The claim is compensable; and

iii.    There is sufficient evidence on file to pay compensation.

b.      In these cases:

i.        The CSS must:

a)      Make two documented requests for wages; and

b)     Request that their IMS set the FWW at one-third of the SAWW.

ii.      Prior to setting the FWW, the IMS will:

a)      Ensure that the CSS has made two documented attempts to contact the IW/IW representative and EOR/employer representative to request earnings;

b)     Verify that no wage information is in the claim;

c)      Verify the claim is in Pending status; and

d)     Place a note titled, “IMS reviewed FWW wage set at one-third SAWW” in the claim authorizing the FWW to be set at one-third of the SAWW.

iii.    The IMS may not set the AWW at one-third of the SAWW.

2.      Rush Requests

a.      In certain situations, it may be necessary to make a rush request to calculate wages. Valid reasons to make a rush request include:

i.        Catastrophic claims;

ii.      Financial hardship;

iii.    Ombuds/Constituent Affairs complaint issues;

iv.     When the claim is within one or two business days of the Day 28 determination; or

v.       The IC has ordered compensation to be paid.

b.      If the CSS believes that a rush request is necessary, they must staff the rush request with their IMS.

c.       The IMS must:

i.        Verify that the CSS has properly followed policy and procedure and documented their attempts to obtain necessary information; and

ii.      Submit the rush request to the BWC Wage Calc Rush email box. It is not necessary to copy a Wage Team IMS on this email.

3.      In death claims where there are no wages on file and BWC has been ordered to pay death benefits, the CSS will make a referral to the Wage Team to set the AWW at $0.

 

E.      Issuing the Order to Set Wages

1.      The CSS must include the setting of wages in the BWC Initial Allowance Order when:

a.      Sufficient wage information is available at the time the order is issued; or

b.      Evidence on file supports the payment of TT, but wage information has not been submitted. In this case, the FWW must be set at one-third of the SAWW.

2.      Upon completion of the calculation of wages by the Wage Team, the CSS will include and exclude the appropriate wage in the claims management system before completing the BWC order.

3.      If the FWW has been set at one-third of the SAWW, Claims Services staff will include a statement in the BWC order which informs the parties to the claim that the FWW has been set based on the SAWW for the DOI, or DOD in OD claims.

4.      Claims Services staff will:

a.      Use the standard wage setting inserts provided in the BWC orders to set wages; and

b.      Include the rate at which any anticipated compensation will be paid.

 

F.      Requests to Set or Reset Wages

1.      Setting Wages in a Medical-Only Claim

a.      If a C-86, Wages – IW, or Wages – Emp, or the equivalent, is filed with supporting earnings information requesting the calculation of wages, the Medical Claims Supervisor will reassign the claim to a lost-time office, who will then evaluate the request.

b.      If earnings information is received without a written request, the medical claims specialist (MCS) will:

i.        Contact the IW/IW representative to inform them that a written request is required to set wages; and

ii.      Reassign the claim to a field office for processing.

2.      Resetting Wages Within the BWC Initial Claim Determination Appeal Period

a.      When new earnings information (e.g., more detailed information, missing earning periods) that may impact the wage calculation is received, the CSS must:

i.        Send an email recalculation notification to the Wage CSS who did the initial wage calculation and copy the Wage Team IMS; and

ii.      Refer the new evidence to the Wage CSS for a priority recalculation.

b.      When new evidence will not impact the wage calculation (e.g., annual earnings vs. wages previously set using detailed earnings) the CSS must staff the issue with their IMS to verify that no action is required.

3.      Resetting Wages Outside of the BWC Initial Claim Determination Appeal Period

a.      When new wage information is received in the claim without a written request to recalculate wages, the CSS must:

i.        Contact the filing party to inform them that a written request is required to recalculate wages; and

ii.      Not refer to the Wage Team until the written request is received.

b.      When a written request with new earnings evidence is received that may impact the wage calculation (e.g., BWC receives information about earning periods that were previously missing, or BWC had annual earnings on file and receives detailed earnings), the CSS must refer the request to the Wage Team for recalculation.

c.       When new evidence will not impact the wage calculation (e.g., annual earnings vs. wages previously calculated using detailed earnings) the CSS must staff the issue with their IMS to verify no action is required.

d.      If a request to reset wages is received and the supporting evidence is unclear or missing, the CSS must contact the filing party to clarify or obtain the evidence.

i.        If the CSS is unable to obtain the missing documentation, the CSS must:

a)      Dismiss the request using the BWC Miscellaneous Order if BWC previously set wages; or

b)     Follow the steps outlined in Section V.H of this procedure if the IC previously set wages.

ii.      If additional information is submitted, the CSS may refer the claim to the Wage Team to recalculate wages and follow:

a)      Section V.G of this procedure if BWC previously set wages; or

b)     Section V.H of this procedure if the IC previously set wages.

 

G.     Resetting Wages Set by BWC Order

1.      The CSS may reset wages without a written request when BWC discovers an error in a prior calculation. Prior to doing so, the CSS must staff the issue with their IMS and BWC Legal to determine whether the adjustment should be made.

2.      Issuing a BWC Order to Reset Wages

a.      The CSS may issue a BWC order resetting wages when the IC has not previously set the wages.

b.      The CSS will issue a BWC order to grant the new FWW and/or AWW if BWC’s evaluation results in a higher FWW and/or AWW amount.

i.        The BWC order must include language that addresses the adjustment of compensation.

ii.      The adjustment language in the BWC order must indicate:

a)      The type of compensation being adjusted;

b)     Whether the adjustment is for a closed period or for all compensation (previously paid and/or future payments);

c)      The start date of the adjustment; and

d)     If applicable, that payments made prior to the order will be adjusted once the order is final.

c.       The CSS will issue a BWC order to deny if:

i.        The evaluation results in no change to the FWW and/or AWW amount; or

ii.      The accompanying evidence is not more detailed than the evidence previously used to set wages.

d.      The CSS will issue a BWC order to grant the new FWW and/or AWW if BWC’s evaluation results in a lower FWW and/or AWW amount.

i.        If an overpayment results from the change in wages, the CSS will address the overpayment once the wage order is final.

ii.      When the wage order becomes final, the CSS will create a separate BWC order establishing the overpayment amount, if applicable.

 

H.     Resetting Wages Previously Set by IC Order

1.      Only the IC has jurisdiction to reset wages previously set by IC order.

a.      The CSS must refer written requests to reset wages previously set by the IC to the IC for hearing via a Notice of Referral (NOR).

b.      The NOR must:

i.        Indicate whether BWC recommends the request to recalculate wages be allowed or denied;

ii.      State the reason(s) for the recommendation (e.g., the wages were previously calculated based on more detailed evidence); and

iii.    Cite the specific evidence submitted to set wages, including the date the evidence was received and from whom it was received.

2.      The CSS may request that the Wage CSS completes a new wage calculation worksheet as evidence for the claim file, upon request by BWC Legal.

 

I.        Making Payment Based on a BWC or IC Order

1.      The CSS will pay compensation based on a BWC order when:

a.      A BWC Initial Allowance Order includes the granting of compensation and the setting of wages, and the claim is certified;

b.      A BWC order granting compensation and setting wages is final, or a waiver of appeal has been filed;

c.       A BWC Tentative Order granting a %PP and a BWC order setting wages are final, or a waiver of appeal has been filed by the appropriate parties for each order; or

d.      The IC order awarding compensation, except %PP, is issued, regardless of the wage order appeal period.

2.      Upon receipt of an IC order that sets wages, the CSS will pay compensation that had been ordered to be paid but had not yet been paid because wages had not been set.

3.      See Section V.J, Adjusting Previously Paid Compensation, for information on adjusting previously paid compensation based on a BWC or IC order that modifies wages.

 

J.      Adjusting Previously Paid Compensation

1.      Claims services staff will adjust previously paid compensation when the appeal period for a BWC order which modifies wages expires, and either:

a.      No appeals were filed; or

b.      Waivers are received.

2.      Claims services staff must pay ongoing compensation at the new rate upon receipt of an IC order that modifies wages.

3.      If the IC order specifically includes the adjustment of previously paid compensation Claims Services staff will adjust previously paid compensation and:

a.      Release additional payment due to the IW upon receipt of the IC order; or

b.      Issue the appropriate notification of IC overpayment as specified in the Overpayment of Compensation policy once the IC order is final.

4.      If the BWC or IC order does not specifically include the adjustment of previously paid compensation, Claims Services staff will wait until the BWC or IC order is final and then issue a BWC order to:

a.      Adjust previously paid compensation and release payment due to the IW. Payment cannot be made until the adjustment order is final or waivers are received; or

b.      Create an overpayment as specified in the Overpayment of Compensation policy and procedure. The overpayment cannot be collected until the overpayment BWC order is final or waivers are received.

5.      The period of an adjustment in compensation varies depending on what caused the wages to be reset.

a.      If a request to reset wages is filed by a party to the claim, and Claims Services staff determines compensation is payable to the IW, adjustment is limited to any compensation paid in the two years before the request to reset wages was filed, per State ex rel. Cobble v. Indus Comm’n. This adjustment is based on the date payment is made, not the “from” and “to” dates for which compensation was paid. For example, given the current date as 9/1/2024:

i.        If compensation was paid to the IW on 8/1/2024 for the period 1/1/2021 to 5/1/2021, that compensation would be adjusted because the date the payment was made was within the last two years.

ii.      If compensation was paid to the IW on 6/1/2021 for the period 1/1/2021 to 5/1/2021, that compensation would not be adjusted because the payment was not made within the last two years.

b.      If no request was made by a party to reset wages, all previously paid compensation affected may be adjusted, per State ex rel. Drone v. Indus. Comm’n. These modifications to wages are commonly generated when BWC staff discovers an error in calculation.

c.       All previously paid compensation may be adjusted if the change in wages results in an overpayment.

 

VI. PROCEDURE: WAGE TEAM

 

A.      General Claim Note and Documentation Requirements

1.      BWC staff will refer to the Standard Claim File Documentation and Altered Documents policy and procedure for claim note and documentation requirements; and

2.      Must follow any other specific instructions for claim notes and documentation included in this procedure.

 

B.      Calculation of Wages: General Information

1.      The Wage CSS must calculate the FWW and/or AWW in the claim using the wage calculation worksheet whenever possible.

2.      The Wage CSS must:

a.      Calculate wages within five days from the referral date;

b.      Prioritize initial claim determinations and rushes; and

c.       Staff with the Wage Team IMS if they encounter any issues that will delay the wages calculation.

3.      The Wage Team will attempt to complete all rush requests the day they are received. Processing time may be impacted by:

a.      Volume of requests received; and

b.      Time of day the request was received.

4.      If the Wage CSS receives a Wages – IW form without supporting documentation, the Wage CSS will staff with BWC Legal or their IMS as necessary to determine if earnings without supporting documentation are appropriate to use.

5.      When the CSS has received wage information but was unable to secure additional information or clarification, the Wage CSS will attempt to obtain the necessary information.

a.      Reasons a Wage CSS may need to obtain clarification include, but are not limited to:

i.        An employer submits earnings information and there is a variation in the earnings;

ii.      An employer submits biweekly earnings, and it is necessary to obtain the breakdown of the seven days prior to DOI, or DOD in OD claims without overtime; or

iii.    Earnings information is submitted via hard copy, but some numbers are not readable.

b.      The Wage CSS must:

i.        Follow-up with the appropriate parties; and

ii.      Wait for the requested information for two business days after the follow-up attempt.

c.       The Wage CSS may rely on clarification of earnings obtained by phone.

d.      If, after two business days, the Wage CSS does not receive the requested information, the Wage CSS must staff with their IMS to determine next steps.

6.      Upon receipt of a request to set wages in a death claim where there are no wages on file and BWC has been ordered to pay death benefits, the Wage CSS will set the AWW at $0.

7.      Upon completion of the wage calculation, the Wage CSS must:

a.      Ensure they have included the following information on the calculation worksheet:

i.        The detail of earnings used for the calculations, including the name of the employer(s);

ii.      The method (or special circumstances for alternate method) used for calculating the FWW and/or AWW;

iii.    The name of the Wage CSS who completed the calculations; and

iv.     The date the calculations were completed.

b.      Image the completed wage calculation worksheet packet;

c.       Rename the imaged document;

d.      Document the above in claim notes;

e.      Enter the FWW and AWW in the claims management system; and

f.        Create a “Wage Specialist Update Completed” work item to the user with a due date of the next business day acknowledging completion of the wage calculation.

 

C.      Earnings Included and Excluded from Wage Calculation

1.      The Wage CSS will refer to policy Section IV.C, Earnings Included and Excluded in Wage Calculation, to determine which earnings to include and exclude in the calculation of wages.

2.      The Wage CSS may exclude passive income from the calculation of wages after staffing with their IMS or BWC Legal to ensure the income is, in fact, passive.

3.      Part-Time Work and Unemployment

a.      If an IW worked and received partial unemployment compensation over the same period and submits evidence that they completed a job search during that period, the Wage CSS will exclude the earnings from the part-time employment and weeks from the calculation of wages.

b.      If an IW worked and received partial unemployment compensation over the same period and the IW indicates that they did not continue a job search during that time period or fails to submit evidence of a job search, the Wage CSS must include the earnings from the part-time employment and the weeks in the calculation of wages.

c.       If seasonal employment is a lifestyle choice, those weeks will be included regardless of the absence/presence of a job search.

4.      If the Wage CSS suspects that wages reported as income have not been reported to the Internal Revenue Service (IRS), the Wage CSS may send notification to the IRS of any discrepancy (e.g., S-Corporation profits, partnership profits) using IRS Information Referral (Form 3949-A) only after staffing with their IMS and the BWC Fraud Department.

 

D.     Converting Earnings to a Weekly Rate

1.      The Wage CSS must convert earnings that are paid with a frequency other than weekly or biweekly to a weekly rate for calculating wages using the wage calculation worksheet.

2.      For example:

a.      IW submitted $1,000 as earnings for the period of Feb. 1 through Feb. 28.

b.      Earnings period equals 28 days.

c.       $1,000 divided by 28 = $35.71 per day (rounded to the nearest whole cent).

d.      $35.71 times seven = $249.97 per week.

 

E.      Calculating the FWW

1.      The Wage CSS will use the FWW calculations detailed in policy Section IV.D, Calculating the FWW.

2.      The Wage CSS will generally use earnings for the full pay periods prior to the DOI, or DOD in OD claims for the calculation of FWW.

a.      However, if the earnings amount for the actual seven days prior to the DOI or DOD is available and there is a benefit to the IW, the Wage CSS must use those earnings in the calculation of the FWW.

b.      Earnings from employers other than the EOR will be applied to the FWW as well if those earnings fall within the six weeks prior to the DOI.

3.      The Wage CSS must clarify the earnings with the EOR for the seven days prior to the DOI, or DOD in OD claims as follows:

a.      When earnings are submitted with a frequency other than weekly; or

b.      It is not possible to determine if overtime is included in the reported earnings.

c.       If clarification cannot be obtained, the Wage CSS will calculate a weekly rate as described in Section VI.D, Converting Earnings to a Weekly Rate, above.

4.      When calculating the FWW:

a.      The Wage CSS will include all earnings they receive, including earnings from employers other than the EOR for whom the IW worked during the six weeks prior to the DOI, or DOD in OD claims.

b.      The total earnings for the six weeks prior are divided by six, even if there were weeks with no earnings.

c.       The Wage CSS may consider when a factory, mine, or other place of employment is working short time to divide work among employees. The Wage CSS must staff this issue with BWC Legal.

d.      If no evidence of earnings is provided, the Wage CSS will set the FWW at one-third of the SAWW.

 

F.      Calculating the AWW

1.      The Wage CSS will use the AWW calculations detailed in policy Section IV.E, Calculating the AWW.

2.      If the IW had no earnings during the 52 weeks prior to the DOI, or DOD in OD claims, the AWW will be set at $0. This happens primarily in OD claims where the IW retired prior to the DOD. A calculation worksheet is not required.

3.      The Wage CSS will ensure that proper supporting documentation is on file prior to determining whether to include or exclude periods of unemployment, seasonal work, or incarceration, as described in Section IV.E.4 of this policy.

a.      A signed Wages – IW form is considered supporting documentation when considering whether to exclude periods of unemployment due to reasons beyond the IW’s control.

b.      The Wage CSS may staff with BWC Legal if they are unsure whether to include or exclude periods of unemployment, seasonal work, or incarceration.

4.      Calculating Earnings for AWW Based on Annual Earnings

a.      The Wage CSS will apportion annual earnings for the year of and the year prior to the DOI, or DOD in OD claims, such that an average weekly rate for each year is used for the portion of the 52 weeks prior to the DOI, or DOD in OD claims that fall in each of the two years. For example, if the DOI, or DOD in OD claims, is June 30, the earnings used for the calculation of the AWW will be:

i.        26 weeks of the average weekly earnings for the year of the DOI, or DOD in OD claims; and

ii.      26 weeks of the average weekly earnings for the year prior to the DOI, or DOD in OD claims.

b.      When detailed earnings are provided for the DOI, or DOD in OD claims, and annual earnings are used for the year prior, the Wage CSS must use the detailed earnings for the year of the injury plus the average earnings for the year prior for the portion of the 52 weeks that falls in the year prior. For example, if the DOI or DOD is June 30, the earnings that will be used for calculation of the AWW will be:

i.        The detailed earnings for Jan. 1 to June 30 of the year of injury, plus;

ii.      The average weekly earnings for the year prior to the DOI, or DOD in OD claims, for the remaining 26 weeks.

5.      Special AWW Setting Scenarios

a.      If the IW presents special circumstances that make the method of calculating the AWW described above unfair, the Wage CSS may use alternative methods for setting wages to provide substantial justice but without providing a windfall to the IW.

b.      Reasons why an alternative wage setting method might be used include, but are not limited to:

i.        Earning loss attributed to an unsuccessful business:

a)      Tax records are normally used to prove an unsuccessful business, but a statement from a tax preparer could be used.

b)     The Wage CSS must contact EM staff to compare reported earnings to payroll reported for premium purposes. EM staff will determine if an employer audit is necessary.

ii.      New in the labor market: If an IW was relatively young, or new to the job market and the Wage CSS determines earnings would be expected to increase, the Wage CSS may consider that in determining the AWW.

iii.    Seasonal employees:

a)      When the IW is a seasonal employee, the Wage CSS must investigate the nature of the seasonal employment and the IW’s intent to work beyond the seasonal employment.

i)        If the seasonal employment is a lifestyle choice, then the period of unemployment would not be excluded from the calculation, regardless of whether the IW completed a job search.

ii)      Registration and receipt of unemployment benefits alone is not sufficient proof of a job search effort for seasonal employees.

iii)    See Section V.C.10.b for additional information regarding seasonal employees.

iv.     School employees:

a)      The AWW for teachers and school employees is calculated by dividing the entire salary for 52 weeks (less any weeks otherwise excluded), whether the employee chose to receive pay over nine months or 12 months.

b)     Weeks for the summer break will only be excluded if the employee regularly has other work over summer break but did not work for reasons outside their control (no work was available), or if the employee was disabled for the period.

c)      Any wages from summer break employment will be included in calculating the AWW.

v.       Volunteers:

a)      The coverage contract between the employer and BWC (e.g., Contract for Coverage of State Agency or Political Subdivision (U-69)) will specify what the AWW is, or how it should be calculated.

b)     In claims filed by volunteers with no contractual arrangement regarding AWW and no earnings from other employers, the Wage CSS will staff the setting of wages with BWC Legal to consider setting wages at $0.

c)      Wages for volunteers will include earnings from other employers, if provided.

d)     The Wage CSS will set wages in a claim for a volunteer only when compensation other than scheduled loss will be paid.

i)        If only scheduled loss is paid it is not necessary to set wages for the IW.

ii)      Scheduled loss is paid based on the SAWW for the DOI or date of disease in OD claims.

vi.     Self-employed IWs:  

a)      When no earnings are available, the Wage CSS will set the AWW for self-employed IWs using the minimum payroll reported for purposes of setting premium.

b)     When earnings are submitted, the Wage CSS will staff with EM personnel to compare earnings reported with payroll reported for premium.

i)        If earnings submitted are less than the payroll reported, wages will be set based on the earnings reported.

ii)      If earnings submitted are more than payroll reported, but appear to be legitimate, the Wage CSS will set wages based on the earnings submitted and staff with EM to determine if a premium audit will be done.

iii)    If earnings submitted are more than the payroll report but there is some question about their legitimacy, the Wage CSS will make a referral to EM for a premium audit.

vii.   Injuries while involved in a vocational rehabilitation plan:  

a)      The FWW and AWW in claims that occur during participation in a vocational rehabilitation plan will be set equal to the wages in the claim for the original injury.

b)     Compensation maximum and minimums are based on the DOI, or DOD in an OD claim, in the newly filed claim.

c.       The Wage CSS must staff special wage setting situations with their IMS and/or BWC Legal.